Did the former chief executive of mega-supplier Delphi intentionally mislead investors even as the company was spiraling down towards bankruptcy? That’s the key question as the long federal trial of J.T.Battenberg former Delphi chairman and CEO wraps up, with both defense attorneys and prosecutors laying out their final arguments.

The Securities and Exchange Commission’s civil complaint against Battenberg charges that the former Delphi executive – who retired as the company collapsed — set out to hide Delphi’s financial woes.

Battenberg faces no jail time but could be barred from serving on the board of any publicly traded company — and be forced to pay substantial fines. It also would serve as a severe rebuke to an executive who was considered one of Detroit’s major corporate stars during the 1980s and 1990s.

The SEC’s prosecutors have hammered on the idea that Battenberg deliberately deceived outside investors about the handling of an item in the company financial filings in the years before Delphi filed for bankruptcy in 2005. (The company only emerged from Chapter 11 protection last year, marking the longest corporate bankruptcy in U.S. history.)

The SEC sued Battenberg and other ex-Delphi executives in 2006, alleging they engaged in “fraudulent accounting or disclosure schemes.” Two other former Delphi executives, Milan Belans, a former director of capital planning and pension analysis; and Catherine Rozanski, a former accounting director, settled with the SEC during trial. Belans agreed to pay $87,500 in disgorgement, interest and civil penalties, court filings show. Rozanski agreed to a $40,000 civil penalty.

Battenberg’s lawyers have repeatedly asserted their client never did anything wrong and said the SEC hadn’t provided evidence to support its claims..

However, during the course of the trial, former Delphi financial staffers testified they were coached by senior executives on how to handle a disputed claim from General Motors.

The SEC maintain Battenberg violated federal securities laws through improper accounting for a $237-million payment Delphi made to General Motors as part of a settlement involving warranty claims.

Delphi improperly recorded $202 million of the total amount as a pension and other post-employment benefit payment to the former parent company instead of charging the payment to GM against income which would have reduced Delphi’s quarterly profits.

The payment to GM grew out of a long-standing dispute with the automaker that festered for months after the automaker’s 1999 spinoff of Delphi. The giant supplier repeatedly protested GM’s claims but found it was steadily losing business from GM as the dispute dragged on, Battenberg said when he took the stand in his own defense, last autumn.

Since emerging from bankruptcy, Delphi has downsized its operations significantly, cutting tens of thousands of jobs and abandoning many old-line operations to focus on more high-tech parts and components and to expand its customer base beyond General Motors.

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